DEFINITION: Something is fungible if it can be replaced with something equivalent so that when the replacement is made, you are neither better nor worse off than before. Fungible therefore refers to things that can be interchanged without gain or loss. If you and I swap one-dollar bills, neither of us is better or worse off. If we swap equal amounts of bitcoins or some other cryptocurrency, we’re likewise no better or worse off (save for transaction fees). So too, if we swap the same number of fungible tokens (such as gambling tokens, whether these be physically stored behind a counter or digitally stored on a blockchain), we’re likewise no better or worse off.

ETYMOLOGY: Fungible entered the English language in the 1600s from the Latin. In classical Latin, its root appears as a verb that takes the passive form, so if you try to look it up in the standard Lewis & Short Latin Dictionary, you won’t find it as fungo but rather as fungor. According to Lewis & Short, the word has two main meanings:

  1. to busy one’s self with or be engaged in something; to perform, execute, administer, discharge, observe, do;
  2. to perform, discharge, contribute, pay any thing due from one.

Already here we see actions performed in legal and financial contexts. When fungible entered English in the 17th century, it came in through the Medieval Latin adjective fungibilis, where it assumed the meanings of useful and interchangeable (interchangeable things, after all, tend to be useful). This usage came especially to the fore in idiomatic phrases such as fungi vice (the “vice” here refers not to corruption but to the Latin vicis, meaning to alternate or reciprocate, as in the phrase vice versa) and fungi pro (as in to take the place of).

Fungible has thus come to refer to anything (especially goods and services) that can be readily replaced with or exchanged for things that are not merely similar but essentially equivalent.

USAGE: Strictly speaking, fungible does not admit matters of degree. If something is fungible, it should be replaceable with no additional benefit or deficit, period. In other words, the swap should be clean with no remainder. Cash denominated in bills or coins have traditionally played such a role, but so have other commodities as well. Thus gold and oil are fungible commodities.

Nonetheless, it seems that the usage of fungible can be extended to admit degrees. For instance, the more indispensable someone is, the less fungible they are. Thus some might argue that Steve Jobs was for Apple less fungible than Bill Gates for Microsoft.